Here are some good swing trade buys to consider this week. I will give my reasons for trading each one in summary;
Biosante (BPAX); Might be good for a pop up to 1 dollar.
click to enlarge
It is unlikely Biosante will ever see its former pps for several reasons which I will not get into with this write up. The chart shows a new upwards trend line developing from a very oversold condition. Shorts are covering and traders are getting into position to sell on the likely FDA approval of Biosante's T-Gel, expected on Feb.14th.
In order to take advantage of this catalyst, consider trading in and out of Biosante up to the approval date. Biosante will likely sell off back to $0.50 cents on the news of approval. This run up presents a good opportunity for longs who are in a good amount of pain to double down and get out of their bad positions.
If the stock manages to get over 1 dollar again it will likely be shorted very hard. This is because most retail traders are not allowed to short any stock under 1 dollar. You can bet many people are hoping for an opportunity to short Biosante when and if it reaches over 1 dollar.
Be careful to curtail greed on this one, you could get severely burned.
Pacific Ethanol (PEIX); Might be good for a short term pop to $1.60, higher on potential earnings upside surprise.
PEIX looks to have bottomed out recently and it appears the stock is in accumulation mode. Volume has slowed down, yet the pps has very slowly been trending upwards. PEIX has lowered guidance going into the Q4 2011 earnings call. This is one explanation why it appears the stock is slowly being accumulated by some traders. If PEIX surprises to the upside, we can expect a stronger rally, and a good chance of a double from the current pps level.
SIGA Technologies (SIGA); I still remain bullish on my call to see a move to over 4 dollars with Siga.
In my article here, I wrote about why I believed SIGA could be good for a short term buy. So far, I have been on target with this one, as SIGA moved from a price of $2.57 to a closing price of 3.22 on 1/20/11.
In that article, I mention the CEO recently bought 50k shares. I believed then and still believe now he has done this for a swing trade. The chart shows that SIGA was being accumulated before the recent pop. The last trading session showed no indication of SIGA retracing to fill the gap up.
Arena Pharmaceuticals (ARNA); Short selling exhausted, volume slowing down while pps remains steady. Short cover pop to $1.80- $2.00 is possible.
In another article I wrote here, I listed Arena as a sell. That call is based on the longer term prospects of Arena, which I do not particularly like. After looking over the charts, volume, and short activity, it appears short sellers have run their course on Arena for the time being. I expect a short cover pop to the 2 dollar level soon. Where Arena goes from there remains to be seen.
Acorda Therapeutics (ACOR); Down move towards $25 was expected, up trend channel in tact, short term pop to 27 is possible.
Acorda is a company I like for the long term as I explain in an article here. I was considering taking a long position in it but backed off for the time being. I want to see how the stock performs in the next 2 weeks and look more into any possible legal issues that might effect Acorda for the long term. This stock also looks like Short selling is exhausted. Based on the trend line between Oct.2011 and Jan.2012, Acorda should see near $27 very soon.
Elan (ELN); Inverted H&S, within a strong upwards trend line. Elan makes an upwards move every time this pattern appears on it's chart. A move to $14.50 looks very possible for this swing trade.
Open High Low Close Volume
|Jan 20, 2012||13.36||13.51||12.97||13.17||4,339,600|
|Jan 19, 2012||13.37||13.51||13.18||13.36||2,864,000|
|Jan 18, 2012||13.67||13.67||13.36||13.38||2,601,300|
|Jan 17, 2012||13.92||14.10||13.47||13.57||3,952,400|
|Jan 13, 2012||13.64||14.04||13.51||13.90||2,895,600|
Short selling has really picked up on Elan as of late. It certainly looks to me that Elan is a favorite target for short sellers. You can bet these short sellers are aware of the what the chart shows technically and will not want to be caught in a squeeze. This bio-pharma also has some interesting potential catalysts to drive the pps.
Other trades to consider:
Ariad Pharma (ARIA); Continually rebounds to the upside after almost every down session. The speculation for this stock is enormous and mega funds are all over it. From it's impressive pipeline of Onocological drugs to it's Strong CEO Dr. Harvey Burger, there is not much not to like about this trade to the upside.
Google (GOOG); Oversold on earnings miss has created an excellent opportunity to get a piece of this great company at a discounted pps. Should be good for a move back over $600 a share very shortly. Google still has so much revenue growth opportunity in it's future, that it makes this trade both good for a short term swing and a long term buy and hold.
Sina Corporation (SINA); Day traders love this Chinese Internet stock that has taken a tumble as of late. Inverted H&S pattern on chart, should be good for a move to $75 soon.
Disclosure: I am long ARIA.